Correlation Between Northern Star and Allegiant Gold
Can any of the company-specific risk be diversified away by investing in both Northern Star and Allegiant Gold at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Northern Star and Allegiant Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Star Resources and Allegiant Gold, you can compare the effects of market volatilities on Northern Star and Allegiant Gold and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Northern Star with a short position of Allegiant Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Star and Allegiant Gold.
Diversification Opportunities for Northern Star and Allegiant Gold
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Northern and Allegiant is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Northern Star Resources and Allegiant Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allegiant Gold and Northern Star is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Northern Star Resources are associated (or correlated) with Allegiant Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allegiant Gold has no effect on the direction of Northern Star i.e., Northern Star and Allegiant Gold go up and down completely randomly.
Pair Corralation between Northern Star and Allegiant Gold
Assuming the 90 days horizon Northern Star Resources is expected to generate 0.63 times more return on investment than Allegiant Gold. However, Northern Star Resources is 1.59 times less risky than Allegiant Gold. It trades about 0.02 of its potential returns per unit of risk. Allegiant Gold is currently generating about -0.06 per unit of risk. If you would invest 1,108 in Northern Star Resources on November 1, 2024 and sell it today you would lose (8.00) from holding Northern Star Resources or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Star Resources vs. Allegiant Gold
Performance |
| Timeline |
| Northern Star Resources |
| Allegiant Gold |
Northern Star and Allegiant Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Star and Allegiant Gold
The main advantage of trading using opposite Northern Star and Allegiant Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Star position performs unexpectedly, Allegiant Gold can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Allegiant Gold will offset losses from the drop in Allegiant Gold's long position.| Northern Star vs. Regis Resources | Northern Star vs. West African Resources | Northern Star vs. Dundee Precious Metals | Northern Star vs. Maple Gold Mines |
| Allegiant Gold vs. Minnova Corp | Allegiant Gold vs. Argo Gold | Allegiant Gold vs. Advance Gold Corp | Allegiant Gold vs. Blue Star Gold |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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